Correlation Between Tae Kyung and Youngchang Chemical
Can any of the company-specific risk be diversified away by investing in both Tae Kyung and Youngchang Chemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tae Kyung and Youngchang Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tae Kyung Chemical and Youngchang Chemical Co, you can compare the effects of market volatilities on Tae Kyung and Youngchang Chemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tae Kyung with a short position of Youngchang Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tae Kyung and Youngchang Chemical.
Diversification Opportunities for Tae Kyung and Youngchang Chemical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tae and Youngchang is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tae Kyung Chemical and Youngchang Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngchang Chemical and Tae Kyung is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tae Kyung Chemical are associated (or correlated) with Youngchang Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngchang Chemical has no effect on the direction of Tae Kyung i.e., Tae Kyung and Youngchang Chemical go up and down completely randomly.
Pair Corralation between Tae Kyung and Youngchang Chemical
Assuming the 90 days trading horizon Tae Kyung is expected to generate 94.46 times less return on investment than Youngchang Chemical. But when comparing it to its historical volatility, Tae Kyung Chemical is 3.15 times less risky than Youngchang Chemical. It trades about 0.02 of its potential returns per unit of risk. Youngchang Chemical Co is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 1,306,000 in Youngchang Chemical Co on October 30, 2024 and sell it today you would earn a total of 849,000 from holding Youngchang Chemical Co or generate 65.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tae Kyung Chemical vs. Youngchang Chemical Co
Performance |
| Timeline |
| Tae Kyung Chemical |
| Youngchang Chemical |
Tae Kyung and Youngchang Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tae Kyung and Youngchang Chemical
The main advantage of trading using opposite Tae Kyung and Youngchang Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tae Kyung position performs unexpectedly, Youngchang Chemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Youngchang Chemical will offset losses from the drop in Youngchang Chemical's long position.| Tae Kyung vs. Youngchang Chemical Co | Tae Kyung vs. Woori Technology Investment | Tae Kyung vs. LB Investment | Tae Kyung vs. TS Investment Corp |
| Youngchang Chemical vs. SBI Investment KOREA | Youngchang Chemical vs. Homecast CoLtd | Youngchang Chemical vs. DB Financial Investment | Youngchang Chemical vs. Coloray International Investment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |